Internet, social media blackout costs $69m

Bangladesh lost $69 million due to internet shutdowns spreading over more than four weeks in the year that ended last June, according to a report by the Centre for Technology Innovation at Washington-based Brookings Institution.

The estimate is conservative and considers only reductions in economic activity and does not account for tax losses or drops in investor, business and consumer confidence, said the century-old research organisation.

The report, which highlights significant economic and social damage that internet service disruptions bring to countries, covered two internet shutdowns in Bangladesh between July 31, 2015 and June 30, 2016. The shutdowns lasted 25 days in total.

On November 18, 2015 the government blocked internet and social media networks Facebook and online messaging and calling services WhatsApp and Viber after the Supreme Court rejected pleas to review the death penalties meted out to top war criminals Salauddin Quader Chowdhury and Ali Ahsan Mohammad Mojaheed.

The shutdown on internet lasted only for an hour but the restrictions continued on Facebook, Viber and WhatsApp until December 12. Later in the same month, the government blocked Twitter, Skype and Imo for three days.

Industry people could not come up with economic losses immediately, but they said internet blocking always directly impacts the ecosystem of the country, while social media blackout harms businesses and social life.

The Brookings paper analysed the economic impact of temporary internet shutdowns. It examined 81 short-term shutdowns in 19 countries, identified their duration, scope and the population affected, and estimated their impact on the gross domestic product.

The analysis found that between July 1, 2015 and June 30, 2016 the shutdowns cost at least $2.4 billion in GDP globally.

Economic losses include $968 million in India, $465 million in Saudi Arabia, $320 million in Morocco, $209 million in Iraq, $116 million in Brazil, $72 million in the Republic of the Congo, $69 million in Pakistan, $48 million in Syria, $35 million in Turkey and $20 million in Algeria, among other places.The report said it is important to point out that the analysis only looked at the economic impact on GDP.

It did not include estimates for lost tax revenues associated with blocked digital access, impact on worker productivity, barriers to business expansion connected with the shutdowns or the loss of investor, consumer and business confidence due to such disruptions.

As such, the $2.4 billion figure is a conservative estimate that likely understates the actual economic damage, according to the report.

The report shows there were 81 disruptions in 19 countries during the period.

As the digital economy expands, it will become even more expensive for nations to shut down the internet.

“Without coordinated action by the international community, this damage is likely to accelerate in the future and further weaken global economic development,” said the report.

Around the world, digital technology is seen as vital for economic development.

A 2012 World Bank analysis found a 10 percentage point increase in fixed broadband generated a 1.35 percent increase in per capita GDP for developing countries and a 1.19 percent increase for developed countries.

Since then, developing nations have become even more reliant on the internet, and digital technology has expanded its role in the overall economy.

The centrality of the internet to social and economic life recently led the United Nations last year to enact a resolution.

The resolution specifically unequivocally condemns measures to intentionally prevent or disrupt access to or dissemination of information online in violation of international human rights law and calls on all nations to refrain from and cease such measures.

“Yet powerful forces continue to threaten the vitality of the internet,” the Brookings report said.

The governments give many reasons for ordering the disruptions such as safeguarding government authority, reducing public dissidence, fighting terrorism, maintaining national security and protecting local businesses, according to a study by researchers of the University of Washington.

The Brookings report said government officials in many countries around the world appear increasingly comfortable blocking access to online services and apps despite the significant economic and social damage that internet service disruptions bring to their countries.

“Whether their ostensible motivations are public security or political self-preservation, government officials should understand the wide-ranging and destructive consequences of these moves.”

“Shutting down access to popular services or to the whole internet -- even for a short period of time -- undermines economic growth, puts lives in jeopardy, separates people from friends and family and erodes confidence in the governments that take such drastic and ill-advised steps.”